DHL CEO Klaus Zumwinkel Under Investigation for Tax Evasion
February 14, 2008 – 9:32 pmUPS and FedEx (to a lesser extent - having just dealt with its own tax issues) must really be singing a merry little tune at what looks like the beginning of the end for competitor DHL. German prosecutors are looking into whether or not DHL CEO Klaus Zumwinkel cheated on his taxes. This is not a good time for DHL, which has lost its monopoly on the domestic postal system and is in the middle of a major self-examination of strategy. It is reportedly considering selling is US-based DHL service to FedEx as well as looking at possibly dumping its German banking subsidiary.
Consumers - on the other hand - have little to sing about because the end of DHL would also mean the end of meaningful competition in the industry. DHL, while failing to turn a profit - is serving a purpose in the market. It makes the other two - Fedex and DHL - earn their customers. History has shown us that for an industry to be truly competitive, three players are needed and right now, DHL is that third player in the parcel delivery business.
- When your primary choices were between Microsoft’s Internet Explorer and Netscape’s Navigator, most people who are not computer illiterate would tell you that neither option was very attractive.
- When it was just between FedEx and UPS, most would agree that services were higher and less efficient. Thanks to competition, packages are delivered much quicker now than they used to be. Some places used to be 10 day destinations for UPS, but those days are long gone.
- Sports card collectors have often moaned about the fact that two main companies - Upper Deck and Topps - control nearly all trading cards made today. When a plan for these two companies to merge came forward, a huge uproar ensued. Thankfully, that idea never got off the grounds.
Competition is a dish best served in three courses. A third competitor - especially one like DHL - whose entire business plan is based on low prices and no frills - will help to ensure that UPS and FedEx don’t run over consumers or their packages with outlandish rates and shoddy business practices - at least not too much more than they already do.
9 Responses to “DHL CEO Klaus Zumwinkel Under Investigation for Tax Evasion”
I agree to an extent about competition. However, business is about making money and making progress from where you started. A big part of progress in this industry is about the technology and people who have worked hard to build great companies. Granted mistakes happen but too many mistakes and you go broke or things start happening that are not considered progress. Airborne was not a healthy company. DHL was a healthy company until they bought DHL and spent a lot of money to keep up with UPS and FedEx. For what 3% of the market share. Time will tell if DHL in the US survives.
By Dan on Feb 15, 2008
The problems DHL is having in the U.S. are self inflicted. DHL has been huge in Europe and beyond for years, but until recently they’ve had no competition. They came to the U.S.A. with that same mindset, thinking people were going to beat a pathway to their door for no other fact than they are huge around the world. Beyond that they appear to think “Express Delivery” means getting it there when they’re good and ready on one of Astar’s aging aircraft. Astar is DHL’s “go to” airline here in the states, they are another story altogether, with their lack of low visibility landing capabilities and inability to carry hazardous cargo, it’s a wonder they stay in business here at all. Yet, DHL hangs on to Astar like grim death….don’t ask me why, I think it’s just cronyism, kind of like “the good ole boys” in the southern USA, birds of a feather flock together and all that. At any rate, it would appear the powers that be at DHL have more dollars than sense ! They have refused to listen to the many experts regarding overnight freight delivery here in the USA and continue to forge ahead with what appears to be little or no game plan at all. In 2007 alone, DHL lost nearly one BILLION dollars in the states, and still, they won’t listen to people here in the states who know what it takes to succeed here…it literally boggles the mind ! Whomever thinks DHL is keeping Fed Ex & UPS honest and competitive here is most definitely kidding themselves.
By Dan H. on Mar 1, 2008
I worked for a dhl cotractor in phoenix called parcel epress delivery.WOW.What a joke this guy expects you to make service,and be a great employee.at 7.91 cents for a 60 hr week.that was after my big raise!Thats before taxes.Happy well payed employees do wonderful shit.You deserve and will get tweakers at that price.NO OVERTIME? WTF.ONLY IN ARIZONA CAN HE GET AWAY WITH IT.
By mike on Mar 3, 2008
Mike, cannot really fault DHL for the actions of its contractors. I am sure that FedEx has contractors who under pay their employees.
By Keith on Mar 3, 2008
I also work for a contractor for DHL in Manchester, NH, and the situation here is the same. No overtime, crappy hourly wages, crappy benefits, and crappy treatment. So, don’t feel bad Mike, it’s not just in AZ, it’s everywhere. And, yes, I do believe you can fault DHL for the treatment of drivers/employees of THEIR contractors. They should mandate a uniform pay scale across the board and allow us access to the same benefits they themselves receive. We wear THEIR uniform, drive vehicles with THEIR company’s name, and deliver THEIR freight, so they should have some control over how their contractors treat their employess. Obviously this is a large-scale problem, since here I am, all the way on the other side of the country, dealing with the same issues. They say DHL is going under, well it is one sinking ship that I will be glad to watch go down. DHL bought out Airborne (I was an Airborne driver prior to the merger), and ran us into the ground. They never had a place in the US Market and should have just left it alone. Now, on top of all their own drivers that they let go during the merger, they are going to put thousands more out of work when this whole saga is through. Thanks DHL!
By Jenn on Mar 14, 2008
dont feel bad guys same thing here in ohio from dhl contractors 3 years and counting the seconds till i can find a job with a little respect! how many people does it take to quit before they take a look at the problem?
By jess on Mar 16, 2008
wow… I have an interview with a DHL contractor tomorrow… thanks for the info… I’ll go to the interview but carrie alot of scepticism in my back pocket.
By Bill on Mar 26, 2008
Let me say I worked for DHL for 2 years under the corporate leadership it was a great company I had great benefits and made 12.50 an hour it was professional then came sept 3 2002 the day which I lost my job due to the merger with airborne.I went to the local airborne contractor and asked if I could work for him I was with him for 3 long years one raise in that whole time my pay was docked for something that was not my fault I saw at least 40 drivers come and go that is a estimate per year I consistantly made service on my route and was treated like a second class citizen the whole time I was there.looking back I have nothing but regret for all time I busted my rear the make DHL a worthy competitor to fedex and ups.If DHL is going to make it there going to have to lean on these contractors to offer some incentatives to work there.Nowdays when I see a DHL driver on his route I just have to wonder how much longer can they go on just letting the contractors they work with get away with every trick in the book.
By matt smith on Apr 1, 2008
You know, I work for DHL in Ops in the Midwest. On the subject on contractors, you cannot blame DHL for all the mismanagement, low wages, etc. We deal with 5 contractors in our station and believe me, a lot of it comes down to the contractor themselves. Hell, one of our contractors’ is living high on the hog while his drivers are complaining of low wages. Other drivers tend to make more money, with their bosses living a little more modestly. Their contracts read pretty much the same. Yes, DHL is in over their heads at the moment but who isn’t in this day and age with surging fuel costs that affect every aspect of daily life? Yes, we have stations that make more more money than others. And yes, they have cut back with those that don’t. What company hasn’t? In our market, Fed Ex and UPS have also been slow. It’s part of the game.
By Ann on Apr 13, 2008